Cash still accounts for 63% of all day-to-day payments by volume. It is particularly popular for low-value payments – over 96% of all payments under £5 in value were made with cash in 2006. Retailers are the biggest recipients of cash, despite the ongoing migration to cards from cash and cheques. About six out of ten of all personal cash transactions by volume are made in retailers. Cash is also heavily used on buses, in pubs and clubs and to pay for meals out or take-aways. Eight in ten of all payments in the travel and entertainment sectors are made by cash.

In terms of the changing trends in use of cash, 2004 was a landmark year when card payments overtook cash by value for the first time in the UK. Although the move from cash to plastic cards has been rapid – as recently as 1999 the UK spent more than £100 billion more in cash than on cards – it still spends over £270 billion each year in cash.

Cash usage may fall further, particularly for low value transactions, as contactless payment card technology becomes more widespread. This recently prompted the CEO of Visa Europe, Peter Ayliffe, to tell The Independent that by 2012 he believes most consumers will have dispensed with coins and notes altogether.

But Sandra Quinn, director of communications at Apacs, says, "Although the way we are using cash is changing significantly, we expect the likelihood of Britain becoming a cashless society in the foreseeable future to be similar to us all working in paperless offices. We have been using notes in Britain for over 300 years and we expect that we will continue to do so in significant amounts for a long time to come."

Apacs points to other factors, besides the rising popularity of card-based payments, for the decline of cash. This includes the fact that the number of people regularly paid in cash has continued to fall. Twenty years ago one in three workers were paid in cash whereas today only 6% are paid in this way.

Now most cash comes from ATMs, and acquisition through this channel has grown dramatically. By 2016, it is expected that cash machines will provide nearly 80 per cent of cash, compared to 65 per cent in 2005.

The £20 note is the most popular denomination in the UK – accounting for 66 per cent of all notes dispensed by British cash machines in the last quarter of 2006. And UK consumers will see a new-style £20 note being introduced from today. It features Adam Smith, one of the fathers of modern economics, on the back and incorporates enhanced security features. It is the same size and predominately the same colour as the old-style £20 note that features Sir Edward Elgar on the back, which will gradually be withdrawn from circulation.